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Implicit Contracts (implicit + contract)
Selected AbstractsImplicit Contracts, Managerial Incentives, and Financial StructureJOURNAL OF ECONOMICS & MANAGEMENT STRATEGY, Issue 3 2001Roberta Dessí This paper examines how managers may be given incentives to exert effort, and to implement efficient implicit contracts with workers. Under certain assumptions, this can be achieved by tying managerial compensation to shareholder value. However, if reputation effects are weak, it is more efficient to adopt an incentive scheme in which the manager is punished by outside investor intervention when performance falls below a critical level, and otherwise retains control, receiving a fixed reward. The required form of outside intervention can be implemented through a financial structure combining hard debt with a dispersed ownership structure. [source] International competition and pay, working time and employment: exploring the processes of adjustmentINDUSTRIAL RELATIONS JOURNAL, Issue 2 2001James Arrowsmith The internationalisation of markets, competition and regulation is increasingly recognised. So far, however, debate about the effects has been largely speculative. This article examines the UK engineering industry. Survey evidence suggests that international comparisons are relatively unimportant, little benchmarking is going on and that stability characterises pay and working time arrangements. Further interview evidence explains that this is because pay and working time are set with employee expectations in mind, whereas it is the treatment of unit costs that reflects international pressures. As a consequence there has been substantial reductions in employment as well as some important changes in work organisation, even if there has been little change in pay or working time systems. In effect, it suggests that there is a form of ,implicit contract' taking place. A wider implication is that the main impetus for the ,Europeanisation' of industrial relations is likely to come from the growing convergence of costs rather than pressures for wage parity. [source] Accounting Recognition, Moral Hazard, and Communication,CONTEMPORARY ACCOUNTING RESEARCH, Issue 3 2000PIERRE JINGHONG LIANG Abstract Two complementary sources of information are studied in a multiperiod agency model. One is an accounting source that partially but credibly conveys the agent's private information through accounting recognition. The other is an unverified communication by the agent (i.e., a self-report). In a simple setting with no communication, alternative labor market frictions lead to alternative optimal recognition policies. When the agent is allowed to communicate his or her private information, accounting signals serve as a veracity check on the agent's self-report. Finally, such communication sometimes makes delaying the recognition optimal. We see contracting and confirmatory roles of accounting as its comparative advantage. As a source of information, accounting is valuable because accounting reports are credible, comprehensive, and subject to careful and professional judgement. While other information sources may be more timely in providing valuation information about an entity, audited accounting information, when used in explicit or implicit contracts, ensures the accuracy of the reports from nonaccounting sources. [source] Implicit Contracts, Managerial Incentives, and Financial StructureJOURNAL OF ECONOMICS & MANAGEMENT STRATEGY, Issue 3 2001Roberta Dessí This paper examines how managers may be given incentives to exert effort, and to implement efficient implicit contracts with workers. Under certain assumptions, this can be achieved by tying managerial compensation to shareholder value. However, if reputation effects are weak, it is more efficient to adopt an incentive scheme in which the manager is punished by outside investor intervention when performance falls below a critical level, and otherwise retains control, receiving a fixed reward. The required form of outside intervention can be implemented through a financial structure combining hard debt with a dispersed ownership structure. [source] Reasons for Wage Rigidity in GermanyLABOUR, Issue 2 2006Wolfgang Franz Based on a survey of 801 firms in Germany and an econometric analysis, we find strong support for explanations based on the effects of labour union contracts and efficiency wages that differ between skill groups. Survey respondents indicate that labour union contracts and implicit contracts are important reasons for wage rigidity for the (less) skilled. Specific human capital and negative signals for new hires are causes of the stickiness of wages for the highly skilled. Compared with US evidence, German firms seem to attach more importance to labour union contracts and specific human capital. [source] | ||||||||||